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The XE results from Jaguar Land Rover's record 2 billion pound investment to improve the automaker's vehicles, factories and powertrains.

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Jaguar says it has learned from the mistakes of the X-Type as it tries again to launch a model that aims to win sales from the BMW 3 series and Audi A4 in the fiercely competitive premium midsize market. Jaguar Land Rover CEO Ralf Speth says the XE is "incredibly important" to the brand because it will bring younger customers and women to Jaguar. The car will start at 27,000 pounds (34,000 euros) for a 2.0-liter diesel, making it the cheapest, smallest and most-efficient model in Jaguar's range when European sales begin early next year.

The company, however, has been here before. In 1998, former Jaguar boss Nick Scheele boldly proclaimed that the British brand, then under Ford’s control, would quadruple sales in four years to 200,000. The prediction was based on the power of the X-Type to “attract a new generation of customers,” Scheele said in a statement at the time. Launched in 2001, the X-Type flopped and Jaguar never came close to its global target. The Ford Mondeo-based car failed to lure enough buyers away from its German rivals. Jaguar ended X-Type production in 2009. As a result, Jaguar’s global sales slumped to 50,000 in 2011 after a high of 130,300 in 2002. Bernstein analyst Max Warburton last year called the X-Type “a financial disaster” for the automaker.

Jaguar executives say this time will be different. “We learned the lessons,” CEO Speth said. “The X-Type was in principle a nice car, but not with the right attributes.” Instead of modifying an old platform from former owner Ford, Jaguar, which is now controlled by India’s Tata Motors, built an all-new rear-wheel-drive architecture that’s 75 percent lightweight aluminum. “There are no limits, no compromises. We started from scratch,” Speth said. The XE is part of a 2 billion pound investment – the company’s largest ever – that includes a new body shop and a new engine plant. Speth believes it was money well spent. “It’s not just a single investment for XE -- it also gave us opportunity for new models.” he said. One of those models is expected to be a crossover to take on the BMW X3 and Audi Q5.

Analyst IHS Automotive estimates Jaguar’s global sales will rise to more than 220,000 by 2018, up from 76,668 last year. IHS predicts all Jaguars, except the F-Type sports car, will use the XE’s platform, but believes the sedan variant of the car will be the biggest seller, reaching a high of 63,736 in 2016 with Europe ranking as the car’s No. 1 market. “It’s an important statement of intent of what customers can expect from a technology and design standpoint,” IHS’ Ian Fletcher said about the XE.

‘Car of today’

The XE’s styling updates the look of the larger XF sedan, which Jaguar head of design Ian Callum says gives it a big advantage over the X-Type. “The X-Type was very much about a conservative, retro look whereas this is very much a car of today,” he told Automotive News Europe. The XE’s muscular stance is helped by a long hood and more rearward situated cabin, made possible by the rear-wheel-drive platform. “Because the X-Type was on a front-wheel-drive platform, the overhang was quite large and the [front] wheel to dashboard measurement very short, so you sensed it was not quite as powerful-looking, unlike a car like this,” Callum said, adding that to him the XE is the “definitive sports sedan.” With analyst-estimated sales of 31,000 XEs in Europe in 2016, Jaguar will remain far behind BMW, which sells about 200,000 units of the 3 series a year in the region. That lower volume, however, could be an advantage. “Jaguar wants to be seen as a slightly more aloof option for a more discerning customer,” Fletcher said.

The bigger question is whether the XE is the car that makes Jaguar profitable. Bernstein’s Warburton last year estimated that while sister brand Land Rover was profitable under Ford’s ownership, Jaguar lost so much money that together the two brands were unprofitable. Tata bought the two brands from Ford in 2008 for $2.3 billion. Not long after that JLR started delivering huge profits for the Indian firm. “In 2008 we were more or less bankrupt,” Speth said. “Since then we’ve doubled our workforce, doubled volume to around 430,000, more than tripled turnover, and last year we delivered 2.5 billion pounds in profit.” JLR doesn’t split the two brands in financial reports, but analysts believe all the money has been coming from Land Rover. With the XE and its derivatives, Jaguar might finally pay its way.